Enron Case Study

What in Gladwell's article do you find most compelling? Is there anything you disagree with?

Gladwell's article is a point of view and its trying to tell the story from that point of view.

Talent V/S Performance - People were getting hired within departments because of perception of talent and not because of their performance in the previous role. In a larger context this translates into lack of accountability. People like Lou Pai mismanaged Enron's power-trading business and made company loose millions in the process but there were no repercussions for him. He was in fact given the charge to run commercial electricity outsourcing business.

Being talented/top performer at school is one thing - one has to almost always work alone -working in a company on the other hand is a different matter altogether where one works in an organization and it always involves working in a team.

Rating system was incomplete where peers used to rate each other and bonuses/promotions were given based on that.

The article also highlights a system where individual were deemed more important that organization or processes that are critical in making any organization successful.

However the authors do go overboard. The tacit implication that the authors are driving towards is that the company went under because it hired smart people or people from top business schools. That is not true - it was a result of bad corporate culture and lack of ethics at the top level.

At the heart of Enron's problem was illegal accounting practices that executives were involved in. In the last decade, MCI, Nortel were among the companies that had to deal with accounting fraud issues. Though there is no similarity in culture or hiring philosophy among these 3 firms. Conversely, there are companies like Mckinsie or Google or Facebook that hire graduates from top tier schools and they have never had this problem. So the suggestion of the author that it was somehow related to hiring smart people from top business schools is a myopic observation.

Also comparison between Mckinsey and Enron seem out of place. A company like Enron had people who worked in one of the multiple business units - the failure resides in lack of organization that would have created and promoted a culture of success and hard work rather than relying jus to talent. On the other hand Mckinsey is a consulting firm where individuals still often work in a lot smaller teams.

The article is making a case using examples of Southwest airlines and P&G arguing that these companies who don't hire top tier MBAs but rely on a system that is efficient. On the flip side, the number of companies that hire top MBAs and are successful is still far greater. So again its not a